The following question:
The Bridgeport Corp. sells ofce equipment and supplies to many organizations in the city and surrounding area on contract terms of 2/10, n/30. In the past, over 75% of the credit customers have taken advantage of the discount by paying within 10 days of the invoice date. However, the number of customers taking the full 30 days to pay has increased within the last year. It now appears that fewer than 60% of the customers are taking the discount. Bad debts as a percentage of gross credit sales have risen from the 1.50% of past years to about 4% in the current year. The controller responded to a request for more information on the deterioration in collections of accounts receivable by preparing the following report: Bridgeport Corp. Finance Committee ReportAccounts Receivable Collections May 31, 2020 The fact that some credit accounts will prove uncollectible is normal. Annual bad debt write offs have been 1.50% of credit sales over the past ve years. During the last scal year, this percentage increased to slightly less than 4%. The current Accounts Receivable balance is $1.80 million. The condition of this balance in terms of age and probability of collection is as follows: Proportion of Total (96) Age Categories Probability of Collection (56) 68 not yet due 99 15 less than 30 days past due 95.00 8 30 to 60 days past due 94 5 61 to 120 days past due 91 2.50 121 to 180 days past due 69 1.50 more than 180 days past due 20 Allowance for Doubtful Accounts had a credit balance of $43,200 on June 1, 2019. The Bridgeport Corp. has provided for a monthly bad debt expense accrual during the current scal year based on the assumption that 4% of gross credit sales will be uncollectible. Total gross credit sales for the 201920 scal year amounted to $4.10 million. Write offs of bad accounts during the year totalled $140,000. Prepare an accounts receivable aging schedule for the Bridgeport Corp. using the age categories identied in the controller's report to the nance committee. Show (1) the amount of accounts receivable outstanding for each age category and in total, and (2) the estimated amount that is uncollectible for each category and in total. (Round proportion and probability answers to 3 decimal places, eg. 5.2 75 and other answers to 0 decimal places, e3. 5,2 75.) Bridgeport Corp. Accounts Receivable Aging Schedule May 31, 2020 Proportion of Total Amount in Category Probability of Non-Collection Estimated Uncollectible Amount Not yet due $ $ Less than 30 days past due 30 to 60 days past due 61 to 120 days past due 121 to 180 days past due Over 180 days past due Calculate the amount of the yearend adjustment that is needed to bring Allowance for Doubtful Accounts to the balance indicated by the aging analysis. Additional allowance needed ' Prepare the necessaryjournal entry to adjust the accounting records. (Credit account titles are autamatically indented when amount is entered. Do not indent manually. if no entry is required, select \"Na Entry" for the account titles and enter 0 for the amounts) Account Titles and Explanation Debit Credit
